Circuit master....accounting questions Circuit Masters, Inc. (CMI), is presently operating at 80% of capacity andmanufacturing 123,000 units of a patented electronic component. Thecost structure of the component is as follows:Raw materials $ 6.30 per unitDirect labor 6.30 per unitVariable overhead 8.30 per unitFixed overhead $ 492,000 per yearAn Italian firm has offered to purchase 20,300 of the components at aprice of $25.5 per unit, FOB CMI'splant. The normal selling price is $32.9 per component. This specialorder will not affect any of CMI's "normal" business. Managementcalculated that the cost per component is $25.5, so it is reluctant toaccept this special order.Required:Calculate the fixed overhead per unit.

Step 1: Identify total fixed overheadStep 2: Identify the number of units producedStep 3: Apply the…

Answered: Circuit Masters, Inc. (CMI), is…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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S Circuit Masters Incorporated (CMI) is presently operating at 80% of capacity and manufacturing 110,000 units of a patented electronic component. The cost structure of the component is as follows: Raw materials Direct labor Variable overhead Fixed overhead An Italian firm has offered to purchase 21,200 of the components at a price of $30.00 per unit, FOB CMI's plant. The normal selling price is $35.60 per component. This special order will not affect any of CMI's "normal" business. Management calculated that the cost per component is $27.70, so it is reluctant to accept this special order. Required: a. Calculate the fixed overhead per unit. b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted? $ 7.20 per unit 7.20 per unit 9.20 per unit $ 451,000 per year Complete this question by entering your answers in the tabs below. Req A Req B and C Calculate the fixed overhead per unit? Note: Round your answer to 2 decimal places. Fixed overhead per unit
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M7.
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